Global enterprise spending on cloud infrastructure reached US$94 billion in the first quarter of 2025, marking a 23% year-over-year increase. Amazon's AWS continues to lead the market, while Microsoft and Google show stronger growth momentum. During recent earnings calls, all three companies highlighted tight cloud supply capacity, dispelling earlier market concerns about a potential demand reversal.
Earlier reports suggested that Microsoft and Amazon had canceled some data center leases, sparking speculation about weakening AI and data center demand. However, when their earnings were released between late April and early May, the three providers collectively confirmed robust cloud demand, alleviating those worries.
Amazon CEO Andy Jassy noted that if supply capacity were more abundant, cloud business growth would be even higher. He mentioned challenges with certain components, such as MBs, but expressed hope for improvements over the coming months.
Microsoft CEO Satya Nadella emphasized the ongoing expansion of data center capacity, revealing that the company launched new data centers in ten countries during the first quarter of 2025 alone. Due to rapid cloud demand growth, AI service capacity faces some limitations expected to persist beyond June.
Alphabet CFO Anat Ashkenazi pointed out that cloud customer demand has exceeded the team's available capacity since the fourth quarter of 2024.
According to Synergy Research Group, the global market shares of the top three cloud providers stand at 29%, 22%, and 12%. Compared to previous quarters, where AWS held around 32%, this represents a slight decline.
Secondary providers gain momentum
Among secondary cloud service providers, CoreWeave, Oracle, Databricks, Snowflake, Cloudflare, and China's Huawei Cloud are showing stronger growth momentum. CoreWeave, known for its GPU compute services, is poised to rank among the top 12 cloud providers.
Synergy Research Group also reported that without currency fluctuations, the year-over-year growth rate in cloud infrastructure spending would approach 25 percent.
AI drives market expansion
The emergence of ChatGPT at the end of 2022 sparked a surge in generative AI (GenAI). Overall cloud market growth rates have since increased by 7%. Prior to this, although the market size was expanding, growth rates had been gradually slowing each quarter.
Geographically, all regions are experiencing cloud market expansion. The US market grew 24% in the first quarter of 2025, with other high-growth markets including Brazil, Spain, Italy, South Korea, India, Australia, and Indonesia.
Article edited by Jerry Chen
